【2020.4 Update 2】I checked yesterday and there was no mileage change, but today partner-airline saver awards have already gone up by about 10%. Honestly, I think if partner airlines had just used a simple peak/off-peak system and moved awards up or down by around 10%, that would be acceptable.
I checked PVG-LAX January flights, and the results are below:

  • ANA-operated economy rose to 38,500 (from 35,000)
  • EVA-operated business rose to 88,000 (from 80,000)
  • Of course, UA-operated economy itself is already priced dynamically, at 35,000-63,500 miles

【2020.4 Update】According to TPG, UA has also removed the partner-airline award chart. From UA’s response, partner airlines may soon move to dynamic redemption as well. Dynamic redemption generally links required miles directly to fare: higher fares require more miles. For economy redemptions, this change would have the least impact and may actually make redemption easier. For business-class redemptions, though, it is a significant devaluation. For now, partner redemptions are still following the old chart, and dynamic pricing has not started.

“We announced in April of last year that all award pricing will be dynamic beginning November 2019. This change is consistent with other major carriers and allows us to align information regarding all MileagePlus award flights, whether it is for travel on United or one of our partner airlines.”

Examples

【2019.11 Update】UA award redemptions now no longer have the $75 close-in fee, and some routes have already increased redemption rates under “floating pricing,” such as domestic 8,000-mile routes moving up to 15,000. Dynamic pricing has not been rolled out across all routes yet, but it should be coming soon. From current examples, UA appears to be following Delta and will not provide a fixed conversion ratio (for example, $100 ticket = 10,000 miles). Instead, the close-in fee is being replaced with a fixed miles amount:

  • 3,500 miles for partner award flights
  • 2,500 miles for bookings within seven days
  • 2,000 miles for bookings between seven days and 26-27 days
  • 1,500 miles for bookings between 26-27 and 30 days

XMN—PVG, Air China partner route, which previously required 8,000 miles. On 11.15, redemptions for 11.16 had no Close in fee, but the recent lowest redemption now needs 11,500. As the fare date gets closer, fares are a bit more expensive, floating matchCorrection: 3,500 miles is replacing the close-in fee for partner flights, which is UA’s change for partner airlines

For bookings a little farther out, off-season fares are cheaper, and the rate can still hold at 8,000; for example, the January 2020 dates I selected:

Then during the Spring Festival peak period, fares rose sharply and seem dynamically priced, with miles climbing to 15,000:

UA Mileage Program Changes

This change affects all flights departing after November 15, 2019. UA will no longer publish a mileage chart that lists how many miles each flight requires. The details are:

  • Some mileage prices will be lower than the current chart, and you can book them immediately
  • Some mileage prices will be higher than the current chart, especially during peak periods. You will see these prices right away on flights after November 15
  • After November 15, we will remove the close-in booking fee. If the booking is made less than 21 days before the actual departure date, a $75 Close-in Booking Fee will be automatically charged at ticketing.
  • You can check required miles on ua.com or the app

My Take

The last item is obviously unnecessary, so I’ll skip it. The third item, the removal of the close-in booking fee, is still worth applauding, even though Delta already removed it earlier.

Combining the first two points, it is clear UA plans to adopt a dynamic award chart, meaning the miles required for a ticket will be tied to the fare. When fares are high, more miles are needed; when fares are low, fewer miles are needed. UA also said there is no upper or lower bound on required miles. With this change, we need to watch the following points:

  • Fare-to-mile ratio: Southwest uses this fare-to-mileage model, and the number of Southwest points needed per $1 fare is fixed and consistent across all flights—as long as the fare is for sale, there is a matching points fare. Delta also ties to fare, but has not confirmed exactly what that conversion ratio is; it depends on what appears in the search results. So to evaluate this change, we can only see how UA ultimately sets the miles-to-fare ratio. If it’s 1 mile = 1.5c, people likely won’t complain too harshly. If it’s 1c, that could get ugly. For business/first redemption, a fixed conversion rate would at least eliminate the old frequent 3-4 cents per mile pricing for those cabins.
  • Whether it covers partner airlines: The biggest difference between mileage tickets and hotel points is that airlines in one alliance can be used together for one award ticket. According to UA, this change will include only UA-operated flights. In other words, UA’s partner-operated international flights will continue to follow the previous chart. After all, alliance partner agreements already set the redemption value among partners, and those international partner exchanges are generally priced lower. I expect UA will not act immediately to change partner redemption charts.
  • Whether every ticket can be redeemed: The biggest complaint about mileage tickets (and what beginners find hardest) is that unlike cash tickets, which you can buy as long as you have cash, mileage tickets usually have only a fixed number of seats. Once those seats are gone, they are not released right away, even if there are empty seats on the plane. Usually, another batch may be released only about a week before departure, or even 2-3 days before. Sometimes first class may even sit empty. If, after this change, miles could be redeemed in economy or business at a fixed ratio without limits, that would still be valuable for beginners. After all, miles only have value when redeemed. For UA, if it opens this, it needs to weigh carefully whether it’s worthwhile to recover miles from customers at a fixed ratio. I personally feel UA is unlikely to open this, because the more miles customers hold, the larger their interest-free loan to UA becomes.
  • Will it affect partner award charts: If UA changes the award chart for flights it operates, will it also force partners to change their charts for the UA miles required? I personally think this is unlikely. These international flights are already sold to partners at fixed cash rates; if that changed, all major mileage programs in the world would likely become dynamic.That said, from another angle, both UA and Delta have started using dynamic award charts, so it seems only a matter of time before AA catches up.
  • Impact on transferable points: Ultimate Rewards is UA’s closest partner, and the 1:1 transfer ratio has further reinforced UR’s value. With this change, UR has effectively been devalued too, especially if UA sets the mile value very low, or doesn’t publish it at all (as with Delta). That said, Chase’s Sapphire Reserve card looks even more valuable now. UR can redeem flights at a flat 1.5c per point, and these tickets are treated as cash purchases, so you can still earn miles (exactly depends on cabin). As for Marriott points, after the Marriott package change, most people probably won’t be doing large-volume UA + 7-night hotel redemptions anymore. If you want business class, just transfer 3:1 to AA.

    • One thing I find pretty unfair about this update is that UA will change all flights flown after Nov. 15, not just flights booked after Nov. 15. For people who already booked mileage tickets for travel after Nov. 15, this will be especially inconvenient, and it’s unclear how UA will handle these customers, especially on international routes. With hotel chart changes, you can switch to another hotel, but flight options are far less flexible. That said, this change doesn’t seem to be in effect yet—searching for flights after Nov. 15 still shows the old redemption chart.

    Overall, just looking at this change, the impact is not that large. After all, people who want business class tend to choose fewer UA-operated flights anyway. And if you have enough MR, using Air Canada miles for UA-operated flights is actually pretty good. First, UA-operated flights should have no hefty fuel surcharges; second, the AC and UA charts are similar, with AC only about 5,000 miles higher, and since MR is much easier to earn than UR, that gap is not a big deal; third, AC’s infant fare rules are much better than UA’s, so if you’re traveling with an infant, prioritize issuing with AC.

    But the industry impact is definitely very negative. AA is probably going to take action and move toward dynamic award-pricing changes too. After this shift, elite users and beginners will likely be at the same level, just checking availability and taking whatever is there, because there won’t be much room to “play” with redemption value. You won’t see 3c, 4c-per-point deals to flex about anymore.

    Different player levels

    Here’s how to read this change from different types of users:

    • Mileage newbie: A newcomer usually has limited mileage sources, so point balances are not huge. With dynamic redemption, it’s satisfying to quickly use the points you receive and extract value from them. It’s better than having a pile of points and not knowing what to do with them.
    • Entry-level: Entry-level users should already have accumulated a certain amount of UA miles through credit cards, transfers, and flying. You likely also hold some UR points. If you plan to try business class before this, book your summer award tickets now. For economy, there is no need to rush—book when seats appear, wait when they don’t.
    • Comfort player: UA-operated flights are this bad anyway. It’s great they removed the close-in booking fee.
    • Technical player: After Nov. 15, partner airlines still use the old standards; for transoceanic segments, AC, CA, and ANA are the right picks. If you must book UA-operated, AC also operates some UA flights, the charts are similar, and there are no fuel surcharges—a perfect substitute. For round-trip itineraries, go with ANA; UA is hardly involved anyway. UR can use CSR to lock in 1.5c value, and it’s useful if you also need Hyatt.
    • Cloud player: More devaluation, more devaluation~ UA is garbage.